Meet The One Chipmaker The Entire World Is Now Depending On

There is no doubt about it: Taiwan Semiconductor TSM has emerged as the world's most important chipmaker.

And now, in the midst of a global semiconductor shortage, it is becoming clear exactly how important the company's dominance has been. 

Not only has TSMC made headlines for proposing to expand production into the United States, as we have documented numerous times, but now it is making headlines for how it has become the center of the semiconductor world - and how that can leave the world vulnerable. 

TSMC's chips are in "billion of products", including iPhones, computers, and cars, the Wall Street Journal writes in a new profile of the company. The company has slowly become the world's 11th most valuable company, with a market cap of about $550 billion. The company reported $17.6 billion in profits last year on revenues of about $45.5 billion. TSMC makes "around 92% of the world's most sophisticated chips," the report says. 

(Click on image to enlarge)

This has led to the U.S., Europe and China looking to cut their reliance on chips out of the Taiwanese company. But that's a tough task given its contribution globally. The U.S., for example, only accounts for 12% of the world's chip manufacturing, down from 37% in 1990. 

Analysts aren't confident of there being a more diversified semiconductor supply chain "anytime soon". They attribute this to TSMC's "hard driving culture" and "deep pockets". The industry has become so complex that once one producer falls behind, it becomes tough to catch up. 

And it's going to be even tougher for competition to catch up if TSMC starts to expand in the U.S. After years of investing in R&D since the company's founding in 1987, TSMC finally "broke through" when it started to mass produce chips for mobile phones for Apple:

"A pivotal moment came in 2013, when TSMC began work on mass-producing mobile phone chips for Apple, now its biggest customer. Before that, Samsung—which had its own smartphones—had been the exclusive microprocessor supplier for iPhones.

To fulfill Apple’s first order, TSMC spent $9 billion, with 6,000 people working around the clock to build a fab in Taiwan in a record 11 months. TSMC is now the exclusive supplier for the main processors in iPhones."

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